Category: Uncategorized

U.S. food prices up 3% this year

Posted on by Max Sherrill

FACT: U.S. food prices up 3% this year.

THE NUMBERS: Food costs as a share of household income –

2023*   9.8%
2016   9.6%
2012 10.0%
2000 13.6%
1984 14.0%

* BLS Consumer Expenditure Survey. 2023 is the most recent year available; due to the government shutdown, 2024 figures are delayed until December.

WHAT THEY MEAN: 

Two first-hand accounts of the 1621 “First Thanksgiving” event survive, both concise one-paragraph reports.  Despite the Pilgrims’ austerely religious reputation, both are secular pieces focusing on the food and the participants. Governor Bradford mentions ducks, “great store of wild Turkies, of which they tooke many,” plus venison, “about a peck a meale a weeke to a person,” and “Indean corn.” His lieutenant Edward Winslow, relating the event to friends in Britain, adds codfish, bass, and the five deer Massasoit and his 90 sachems carried in. Neither mentions cranberries or pumpkin pie. Winslow’s conclusion does, though, offer some reflection on the Pilgrims’ good fortune that year:

“And although it be not always so plentifull, as it was at this time with us, yet by the goodness of God, we are so farre from want, that we often wish you partakers of our plentie.”

Four centuries on, the BLS says that as of 2023, Americans spent on average $6,050 a year on “food at home,” and another $3,930 eating out. Taking all these together, the ‘food price’ burden on American families — that is, the cost of food relative to income — has fallen by half since the 1970s and by about 75% in the last century, but not at all over the last decade:

Year Food Budget “Food at Home” Only
2023               9.8%                             5.9%
2016               9.6%                             5.4%
2010               9.8%                             5.8%
2000             13.6%                             6.8%
1984             14.0%                             8.4%
1973             19.1%                                n/a
1950             26.7%                                n/a
1918             38.3%                                n/a

In sum, a very long period of falling food costs appears to have stopped somewhere in the 2010s, and meals now take a bit more of American families’ income than they did during the Obama presidency. This year’s bill is likely to be higher still.  BLS won’t have this year’s consumer spending stats for a while, but the Economic Research Service predicts that food prices will end 2025 about 3% higher than they were last year. So American families aren’t wrong to feel pressure from rising food costs, nor to worry that government policy is pushing them up: tariffs appear to be adding about $1 billion a month to food costs.

Nonetheless, most Americans are still “farre from want.” And as they prepare for this Thursday’s Thanksgiving observance, they have many more choices than the turkeys, fish, corn, and venison available to the Pilgrims and Wampanoags. In that spirit, we wish PPI’s readers, friends, and critics a joyful holiday.

FURTHER READING

Then:

The Pilgrim Hall Museum in Plymouth has two contemporary notes on the first Thanksgiving.

Now:

The Agriculture Department’s Economic Research Service reports that Americans spent $2.92 trillion on food last year, with 81% grown, ranched, or otherwise produced locally and 19% brought in from abroad. The 19% “international” share divides into two parts:

  • About 15% of the foods Americans eat arrive for direct sale to consumers. Say, manchego and olive oil from Spain, French wine, Indian spices, Canadian eggs and mushrooms, Thai and Ecuadoran shrimp, winter grapes and raspberries from Chile and Peru, Mexican avocados, South African oranges and wine, Sri Lankan and Kenyan tea and coffee. This has drifted up from 9% in 2000 and 13% in 2013.
  • The other 4% are inputs for U.S. processed-food producers. Think West African cocoa beans for chocolatiers, Canadian flour for bakers, etc, but also inputs such as energy and paper packaging for U.S. food companies. While direct consumer imports have risen, input costs have dropped slightly from the 5% ERS reports for the mid-2010s.

Tariffs:

According to the USDA’s “Global Agricultural Trade System,” Americans bought $212 billion worth of agricultural goods from abroad last year. Seafood, considered a ‘natural resource’ in their accounting, added $25 billion more.

Tariff collection on these products has jumped by about $1 billion a month since Mr. Trump’s April 2 “international emergency” decree: $290 million in August 2024; $1.25 billion in August 2025. With about $20 billion in food products a month, tariffs overall appear to be adding about 5% to the cost of imported food. This month’s retreat on coffee, bananas, cocoa beans, beef, etc. will ease that a bit, but a threatened new 91% tariff on Italian pasta (on top of the 15% coming from the most recent version of the April 2 decree) in January will add some back. More on this one next month.

Data:

BLS’ Consumer Expenditure Survey tells you how much Americans spend, and what they spend it on.

USDA’s “Global Agricultural Trade System” tallies ag exports and imports.

USITC’s Dataweb reports tariff collection (“calculated duties”) by product.

And the UN Food and Agriculture Organization’s “FAOSTAT” system provides a worldwide context.

And last:

George Washington’s 470-word 1789 Thanksgiving Proclamation — the U.S. government’s first official Thanksgiving observance — came a year after the approval of the Constitution and four days after the first session of Congress closed down. Washington’s government and Congress had achieved quite a lot that year, setting up government departments, creating a revenue system and the Customs Service, organizing federal courts, etc. He strikingly doesn’t brag about it, but instead asks the public to join him in seeking forgiveness for national misdeeds, living up to responsibilities, and trying to do better:

“… that we may unite in most humbly offering our prayers and supplications to the great Lord and Ruler of Nations and beseech him to pardon our national and other transgressions — to enable us all, whether in public or private stations, to perform our several and relative duties properly and punctually — [and] to render our national government a blessing to all the people, by constantly being a Government of wise, just, and constitutional laws, discreetly and faithfully executed and obeyed.”

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

Libert for The Well News: The Blueprint for Democratic Renewal Lies in New Jersey and Virginia

Posted on by Max Sherrill

Zohran Mamdani’s mayoral victory in New York City, while historic, is not the story Democrats should focus on as they look to regain majorities in 2026 and win the presidency in 2028.

Why? Because Mamdani won just 50% of the vote in a reliably blue city — one that has voted Democratic for generations and likely will for generations to come. The real lessons for Democrats can be found in New Jersey and Virginia, where Govs.-elect Mikie Sherrill and Abigail Spanberger showed us how Democrats can win, and win big, by reconnecting with voters who have largely felt left behind by the Democratic Party.

At the Progressive Policy Institute, we have been speaking with these same kinds of voters. In a report authored by Claire Ainsley and Deborah Mattinson, PPI found plenty of evidence that the Democratic Party has moved further from the mainstream values of most Americans.

Keep reading in The Well News.

Mandel in the Wyoming Star: EXCLUSIVE: The Great Build-Out. Part 3. Economics of Data Center Construction.

Posted on by Alex Terr

Dr. Michael Mandel, Chief Economist and Vice President at Progressive Policy Institute, by contrast, leans into the idea that this build-out is more like building railroads than building Pets.com:

“We’ve gone through a long period where “physical” industries such as agriculture, construction, manufacturing, and much of mining have stagnated compared to digital industries. This stagnation in physical industries has especially hurt states such as Wyoming, which has barely grown since 2019.

AI has the potential to transform physical industries, boosting productivity and incomes and opening up new markets. AI will be especially beneficial to states such as Wyoming, which has shown no productivity growth over the past 15 years.

The growth of AI requires investment in large-scale data centers. Data centers are necessary, both to train the underlying models and to power the applications. This investment is no different, conceptually, from laying down rails for trains or drilling for oil. You need to spend on technology to get the benefits of technology, especially when dealing with the complications of the real world.

Indeed, China is pouring hundreds of billions into advanced technology industries, including AI. In this context, the US wave of data center construction and grid modernization looks like a necessity rather than an optional choice.”

Read more in the Wyoming Star. 

Jacoby for Washington Monthly: Three Lessons From Trump’s Latest Plan for Ukraine

Posted on by Alex Terr

The world appears to have dodged a bullet. Donald Trump and team are walking back from their latest and most outlandish proposal for peace in Ukraine. American and Ukrainian negotiators meeting in Geneva are working to revise the plan, and U.S. and European officials have agreed to meet separately to discuss its implications for NATO and the European Union. The outcome of these talks is unknown, and it’s hard to imagine a deal that will satisfy all parties—the Russian, Ukrainian, and European positions remain starkly at odds. But whatever the result, some things are already clear—including three lessons for the U.S. and Europe.

Kyiv and its European allies have long feared that Trump would betray Ukraine by using U.S. leverage to impose an unfair, unrealistic peace settlement modeled on a real estate deal—splitting the difference between two sides, in this case, a rapacious aggressor and its much smaller neighbor struggling to defend itself. In fact, the 28-point peace plan leaked last week was far worse than that. It didn’t even pretend to split the difference. With a few minor exceptions, Moscow got everything it wanted, and Ukraine got nothing. The deal rewarded the aggressor and pummeled the victim, strengthening a voracious Russia while enriching the U.S.

But Washington wasn’t just betraying Ukraine—the proposed deal would also be disastrous for Europe. With Ukraine sidelined—its large, experienced army and cutting-edge weapons neutered—nothing would stand between Europe and Russia, now armed to the teeth, invigorated by four years of war, and openly hungry to reclaim more of what it considers its historic sphere of influence.

Read more in Washington Monthly. 

New PPI Report Warns New York’s Climate Strategy Is Failing as Energy Costs Surge

Posted on by Max Sherrill

WASHINGTON — Today, the Progressive Policy Institute (PPI) released a new report warning that New York is entering a climate and energy cost crisis as the state falls far behind its statutory decarbonization mandates. The report, “New York’s Climate Crossroads: Assuring Affordable Energy,” finds that New York’s current energy strategy is driving up costs for families, constraining reliable supply, and jeopardizing the political viability of the state’s climate agenda. PPI produced the analysis to help lawmakers, regulators, and stakeholders chart a practical path that aligns climate ambition with affordability and reliability.

Authored by Neel Brown, Managing Director at PPI, and John Kemp, an internationally recognized expert on energy markets and systems, the report outlines how New York is off track on key goals ranging from emissions reduction to renewable generation to offshore wind deployment. Distributed solar is the only measure on pace to meet statutory targets. According to the state’s own data, offshore wind and energy storage are classified as severely behind schedule, underscoring systemic challenges in the state’s planning and execution.

“New York set bold climate targets, but ignored the economic and technical realities required to achieve them,” said Brown. “The result is an energy system that is less reliable, more expensive, and now politically unsustainable. Unless policymakers course correct, the state risks turning a climate leadership story into a cautionary tale.”

Key takeaways from the report include:

  • New York’s emissions per capita are already among the nation’s lowest at 8.4 tons, more than 40% below the U.S. average.
  • Electricity prices are 44% higher than the national average, and residential rates have risen 36% since 2019, nearly three times faster than the rest of the country.
  • New York is behind on nearly every major climate mandate, including offshore wind, which is 1% operational, and energy storage, which is 8% operational toward 2030 goals. Only distributed solar is on track.
  • Fossil fuels still supply nearly half of New York’s electricity, and the closure of Indian Point erased a major source of zero-emission power, slowing the state’s progress.
  • Utilities are pursuing additional rate hikes of roughly 20%, driven by aging infrastructure, storm repairs, and rising operating costs, adding further pressure on households already facing higher energy bills.

The report highlights a growing collision between shrinking dispatchable power supply, state-driven increases in electricity demand, and rising ratepayer costs. The closure of the Indian Point nuclear facility removed a major source of zero-emission electricity, while state policies have blocked upgrades to aging natural gas plants and restricted natural gas pipeline capacity. These decisions have tightened supply and added cost pressures.

According to the analysis, residential electricity prices in New York have risen at nearly three times the national average since 2019. Utilities have requested further rate hikes of roughly 20%, citing infrastructure needs, storm recovery, and rising operating costs.

The authors outline a set of pragmatic considerations for policymakers, including shifting from technology mandates to outcome-driven policies, modernizing existing natural gas infrastructure to preserve reliability, and prioritizing affordability to maintain public support.

Read and download the report here.

New York’s Climate Crossroads: Assuring Affordable Energy

Posted on by Alex Terr

INTRODUCTION: THE CHALLENGE OF BALANCING AMBITION WITH REALITY

New York has established some of the nation’s most ambitious decarbonization targets, positioning itself as a leader in climate policy. However, the immense economic burden and practical challenges of implementing these mandates threaten their political viability. As the costs of this transition fall heavily on ratepayers and working families, a critical tension emerges between state-level climate objectives and the everyday financial realities faced by New Yorkers. This paper analyzes the state’s progress toward its climate targets, diagnoses the underlying pressures on its energy system, and evaluates more pragmatic policy pathways that can align climate goals with economic sustainability for its residents.

New York’s historical success in reducing emissions was achieved largely through the cost-effective strategy of retiring coal-fired power plants and replacing them with natural gas generation. The state is now entering a much more difficult and expensive phase, focused on displacing firm, base-load energy sources like natural gas generation with intermittent renewables like wind and solar. This shift fundamentally alters the economic and political calculus of decarbonization, raising questions about the feasibility of the current strategy and its impact on consumers already facing high energy prices.

To fully understand the challenges ahead, it is essential to first appreciate New York’s unique high-cost and high-efficiency energy profile. The latter is not a story of a decarbonized grid won by environmental activism, but of remarkable, nation-leading energy efficiency resulting from urban density and a less energy-intensive economy.

Read the full report.

Ryan for Washington Examiner: Bill Gates is right: It’s time to put people at the center of climate policy

Posted on by Alex Terr

Bill Gates dropped a truth bomb that has the potential to fundamentally reshape the climate conversation in our country. After years of aligning with the doomsday narrative that focuses exclusively on arbitrary, short-term emissions targets, he reversed course. Gates admitted what many of us in the heartland have known all along: While climate change poses serious challenges, our primary focus should be one thing — improving people’s lives.

Gates’s memo marked a significant shift in his climate narrative, reflecting his simple truth that doomerism of the past simply isn’t resonating. He is right. In the recent elections in New Jersey and Virginia, climate was not a top concern for voters or candidates. Govs.-elect Mikie Sherrill (D-NJ) and Abigail Spanberger (D-VA) won by distancing themselves from the apocalyptic crisis language of the past and focusing on what matters most to Americans: energy affordability.

Our country is facing unprecedented energy demand with the buildout of new data centers and other energy-intensive technologies. And electricity costs are a simple function of supply and demand. What candidates such as Sherrill and Spanberger rightly recognize is that protecting everyday Americans struggling to keep their lights on and homes heated requires more power, and fast.

Read more in the Washington Examiner. 

Marshall for The Hill: Wanna Be Radical? Make the Government Work.

Posted on by Max Sherrill

The media is puzzling over voters choosing centrist Democrats in Virginia and New Jersey and democratic socialists in New York City and Seattle.

Take a step back, though, and this election looks a lot like President Trump’s sweep last year: An unsettled electorate still in revolt against the status quo and punishing whoever’s in power.

The voters’ message was less about ideology than institutions. Americans believe their political and governing institutions are broken and want someone who can fix them. They are frustrated with leaders who inflame tribal partisanship rather than forging consensus around tackling pressing national problems. And they think the government has grown too big, costly and stuck in a “can’t do” mentality that puts process over results.

Such attitudes are particularly a problem for Democrats, who present as defenders rather than reformers of failing public institutions. The problem isn’t lack of resources. Former President Joe Biden’s prodigious spending didn’t lower living costs or improve economic prospects for the non-college majority. Voters’ shifts towards Democrats this month, however, indicated that Trump’s tariffs and power grabs aren’t doing the job, either.

When things aren’t working, radical change becomes the pragmatic course for political leaders. But radical change in which direction?

Keep reading in The Hill.

Stablecoins Could Hurt Local Economies. Voters Agree.

Posted on by Alex Terr

With the recent passage of the GENIUS Act earlier this year, stablecoins — digital assets used for transactions and pegged to the value of the dollar — are expected to become more commonly used as a payment tool. But do Americans fully understand the consequences of greater stablecoin usage?  A new poll from Data For Progress provides some important answers; and policymakers should take notice.

In our paper Stablecoins Will Lessen Community Lending, Alex Kilander and I argue that the expansion of stablecoin usage, as envisioned by some proponents of the GENIUS Act, will likely lead to a decline in the number of small banks and in turn, less credit for households, local businesses, and farmers. Why? Because the provision in the law to prevent payment-stablecoins from paying interest/yield can be easily circumvented. Even now, some companies are exploring ways to offer rewards to stablecoin holders, emphasizing that such rewards are not technically “interest” and are offered for reasons other than merely holding the stablecoin itself.

Interestingly, when presented with this information, voters recognize the seriousness of the threat posed by stablecoins to local communities.

According to the Data For Progress poll, a sizable majority (65%) of respondents think that an uptake in stablecoin usage will likely hurt local economies. The results hold true among Democrats (71%), Independents (68%), and Republicans (58%).

The strong bipartisan response should not be considered surprising, given the important role that community banks play in rural areas across the country. Along those same lines, the results should give pause to Senators and Members of Congress, who are considering whether to tighten restrictions on companies’ ability to offer non-traditional forms of yield on payment-stablecoins.

Bureaucracy Blocks Green Progress: 9 Ideas for Democratic Permitting Reform

Posted on by Max Sherrill

In the waning days of the Biden administration, Senators Joe Manchin (D-W.Va.) and John Barrasso (R-Wy.) introduced the Energy Permitting Reform Act of 2024. It represented the culmination of years of debate to streamline and modernize the approval process for infrastructure and energy projects by reducing the time and complexity of environmental reviews and litigation. The aim was to accelerate construction of critical projects — from transmission lines and renewable energy facilities to roads and public works — while still preserving essential environmental safeguards. But under pressure from some members of the progressive wing of the Democratic Party, as well as hardline Republicans unwilling to assist Biden’s environmental agenda, the effort failed.

However, even with a new president and a Republican congressional majority, permitting reform hasn’t disappeared from the legislative agenda. Bipartisan proposals such as the Standardizing Permitting and Expediting Economic Development (SPEED) Act, have emerged, designed to shorten review timelines, reduce litigation delays, and modernize the permitting pipeline.

Yet, Democratic hesitation remains a major obstacle to comprehensive, legislative permitting reform. Many congressional Democrats continue to view permitting reform with suspicion, worried that legislative changes could weaken basic environmental protections. Others warn that certain proposals risk benefiting fossil fuel development at the expense of clean energy.

But there is a strong case that Democrats have much to gain by engaging in the permitting debate. Permitting reform cannot be a rollback of environmental safeguards. Instead, it is an opportunity to find bipartisan compromise and advance core Democratic priorities: accelerating the clean energy transition, modernizing infrastructure, making energy more affordable, lowering costs for families, and strengthening resilience against climate threats. By engaging in the permitting reform debate, Democrats can ensure that reforms balance speed with environmental safeguards and deliver a cleaner, cheaper, and more affordable energy future.

Read the full report.

PPI Proposes Nine Reforms to Fix America’s Broken Permitting System

Posted on by Alex Terr

WASHINGTON — Today, the Progressive Policy Institute (PPI) released a new report outlining nine concrete reforms to fix America’s broken permitting system and accelerate the clean energy transition while preserving strong environmental protections. The report, “Bureaucracy Blocks Green Progress: 9 Ideas for Democratic Permitting Reform,” makes the case that modernizing federal permitting is essential to lowering energy costs, strengthening national security, and building the infrastructure required for long-term economic growth. The report is designed to help Democratic lawmakers identify practical reforms they can champion as part of a bipartisan permitting deal.

Authored by Colin Mortimer, PPI’s Senior Director of Partnerships, the report argues that outdated and duplicative review processes have become a major obstacle to building both clean energy projects and traditional infrastructure. From transmission lines to renewable power to wildfire mitigation efforts, years of delay and litigation are driving up costs for families, deterring investment, and slowing America’s ability to compete globally.

“Permitting reform is not about weakening environmental protections. It is about making sure the projects that cut emissions, lower costs, and strengthen our grid are no longer trapped in regulatory limbo,” said Mortimer. “Democrats in Congress have a strategic opportunity to lead, shape bipartisan outcomes, and ensure reforms deliver both climate progress and economic gains.”

The report highlights the significant national consequences of inaction. According to recent industry and economic analyses, permitting delays have cost the United States more than $100 billion in lost investment, delayed 150,000 jobs, and led to hundreds of millions of tons of additional carbon emissions this decade. With electricity demand expected to rise sharply due to AI, manufacturing growth, and electrification, the need for a modernized permitting framework has never been more urgent.

PPI’s nine recommendations include:

  1. Establishing firm environmental review deadlines to prevent endless analysis
  2. Codifying Supreme Court limits on overly expansive environmental reviews
  3. Adopting a 150-day statute of limitations for lawsuits that challenge approved projects
  4. Creating a true federal single front door to coordinate and accelerate multi-agency reviews
  5. Reforming private right of action rules to curb abuse without silencing legitimate concerns
  6. Expanding FERC’s authority to site critical transmission and modernize natural gas review processes
  7. Providing agencies with the resources needed to conduct faster and more rigorous reviews
  8. Encouraging revenue sharing to strengthen local support for clean energy and infrastructure
  9. Limiting unilateral executive power to revoke major projects that have already met the required standards

“These ideas show that permitting reform can be both pro-environment and pro-growth,” added Mortimer. “If Democrats help shape the conversation, they can secure reforms that speed clean energy deployment, create jobs, and give communities a direct stake in America’s energy future.”

The report emphasizes that durable permitting reform must also be bipartisan. With Congress preparing for major legislative negotiations, PPI argues that Democrats in Congress have much to gain by putting forward solutions that align climate ambition with practical implementation and affordability.

Read and download the report here.

Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI. 

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Media Contact: Ian O’Keefe – iokeefe@ppionline.org

Trump’s New “Affordability” Agenda Would Just Make Everything Worse

Posted on by Max Sherrill

The results of last week’s elections made it clear that the top-of-mind issue for voters is the rising cost of living. Democrats Mikie Sherrill of New Jersey and Virginia’s Abigail Spanberger both won their gubernatorial race by double digits after focusing their campaigns on affordability. Their victories coincided with new polling showing widespread distrust in President Trump’s handling of the economy, underscoring just how politically vulnerable the White House is on cost-of-living issues. 

In the days that followed, the administration responded by releasing a new “affordability agenda.” The plan includes a 50-year mortgage, $2,000 tariff rebate checks, and cash to help people with health-care expenses. Unfortunately, each of these proposals would push prices higher, not lower. 

To start, the administration’s proposal to shift from 30-year to 50-year mortgages may sound like a break for homebuyers because monthly payments would likely fall by a few hundred dollars a month. But stretching loans across half a century dramatically increases total interest paid, delaying the building of equity and leaving homeowners more financially vulnerable. For a $400,000 home with a 10% down payment, a 50-year mortgage at today’s 6.25% fixed rate would reduce monthly payments by roughly $250 compared with a standard 30-year loan. But over the life of the loan, total interest payments would almost double, from $438,000 under a 30-year mortgage to $816,000.

Meanwhile, the policy does nothing to expand housing supply–the real driver of long-term affordability. We face a multi-million-unit housing shortage, driven by restrictive zoning, slow permitting, and years of underbuilding. Without addressing those barriers, cheaper financing simply fuels more bidding for the same limited number of homes, causing home prices to inflate. Real relief requires adding more housing, not just stretching mortgage plans. 

The administration’s second proposal — sending Americans $2,000 checks funded by tariff revenue — is equally misguided. Tariffs are taxes paid by U.S. consumers, so any “rebate” would simply return money Americans already paid through higher prices. Moreover, the revenue might not even be collected because the administration claims tariffs as an effective tool to pressure trading partners into new trade deals. If those deals ultimately involve lifting tariffs — as the White House frequently suggests–then the revenue they are counting on will never materialize. 

And even if the tariffs raise real revenue, the Trump administration has already spent it. The White House has argued that the massive tax cuts in The One Big Beautiful Bill Act (OBBBA) didn’t add to the deficit because their costs would be offset by tariff revenue. That isn’t true, but even if it was, it would mean any new checks would have to be financed with more borrowing. Americans already saw the costly consequences of deficit-financed payments in 2021 when both Presidents Trump and Biden supported an identical stimulus check. In the end, the biggest effect of this policy was to help push inflation to its highest level in four decades. Trump’s rebate checks would repeat this mistake — injecting a fresh burst of demand into an economy constrained by supply shortages. The Committee for a Responsible Federal Budget estimates these rebates would cost roughly $600 billion per year, a staggering amount of new deficit-financed stimulus.

A similar dynamic plays out in the administration’s proposed health-insurance plan. With enhanced Affordable Care Act (ACA) subsidies set to expire at the end of the year, the White House and Congressional Republicans have floated a plan to send unrestricted cash to consumers to buy any plan they want. This would hollow out the ACA marketplaces by encouraging healthier individuals to buy cheaper, less comprehensive coverage. As healthier people leave the marketplace, premiums will rise for everyone else (by definition, more sicker people), prompting insurers to exit and leaving millions with fewer options and higher costs. 

Republicans frame this approach as one that prioritizes consumer choice, but that narrative ignores the structural barriers that prevent health care markets from functioning like ordinary markets. Most patients lack the information needed to shop for value when prices are unclear and providers hold the negotiating power. Simply handing people cash does nothing to change these underlying dynamics.

Even if the policy were good, it would be almost impossible to implement in the middle of an active enrollment cycle, potentially creating serious operational and regulatory risks. The health-care marketplace is built on stable rules and predictable subsidies. Abruptly moving to an entirely different model could confuse consumers and create administrative chaos for insurers precisely when millions are looking to secure coverage for the coming year. 

These policies are all classic demand-side subsidies that put more government-funded purchasing power into the hands of consumers while doing nothing to improve supply. We have already seen how this movie ends. As PPI has written, the central flaw of President Biden’s economic approach four years ago was its overwhelming focus on subsidizing demand: spending trillions in stimulus while doing far too little to expand supply. That imbalance contributed to the highest inflation in 40 years, effectively negating Biden’s most significant legislative accomplishments and ultimately contributing to the political backlash that cost Democrats the White House. 

Now, the Trump administration is repeating those same policy mistakes, only with more damaging consequences. Like Biden, President Trump is making his “affordability agenda” all about boosting household purchasing power without addressing the supply-side challenges that are actually responsible for higher prices. And the risks are far greater this time around following the passage of the fiscally-irresponsible OBBBA that will already stand to add trillions of dollars to the deficit over the next decade.

If the goal is to actually cut costs, policy should focus on expanding supply and lowering structural prices, not simply subsidizing demand. In health care, PPI has proposed a pragmatic reform of the ACA’s premium tax credits that would lower premiums instead of inflating them. On trade, reducing tariffs — and avoiding economically destructive trade wars — remains one of the most direct ways to cut consumer prices. And PPI has long argued for zoning and land-use reform in order to build enough homes to bring down housing costs.

Americans need lower prices, stronger competition, and policies that expand supply rather than simply encourage people to bid against one another for scarce goods and services. A serious affordability agenda would start there. Right now, the administration’s plan offers the illusion of relief — and the certainty of higher prices. It’s time for a more pragmatic strategy that tackles the real drivers of high prices.

Trump administration tariff increases through July 2025: $888 million on toys and dolls, $81 million on bananas, $71 million on tampons, $45 million on bandages

Posted on by Alex Terr

FACT: Through July 2025, tariffs up $888 million on toys and dolls, $81 million on bananas, $71 million on tampons, and $45 million on bandages.

THE NUMBERS: Tariff collection, 2024 vs. 2025* –

 

Jan. – July 2024 Jan. – July 2025
Total Tariff Collection   $43 billion $122 billion
… on cars    $1,968 million  $12,974 million
… on toys and dolls                      $0       $888 million
… on sports equipment       $243 million       $694 million
… on TV sets       $134 million       $500 million
… on coffee        $1.3 million       $359 million
… on tampons         $14 million         $85 million
… on bananas      $0.24 million         $81 million
… on wigs & hair extensions         $10 million         $66 million
… on Band-Aids & other bandages                      $0         $45 million

* USITC Dataweb, most recent data available. As the Trump administration’s July 31st revision of its April 2nd tariff decree sharply increased tariff rates on many countries, the full-year increases will probably be much larger.

WHAT THEY MEAN: 

The late Emperor Napoleon Bonaparte began the Grand Army’s retreat from Moscow in the autumn of 1812 with a small symbolic gesture. He sent home 1,500 injured soldiers, presumably hoping that would calm Paris’ opinion while the other 100,000 stayed on. Trump administration officials are trying something similar. Having read the opinion polls and the election returns, they scrapped Mr. Trump’s tariffs on coffee and bananas last Friday. Here’s the Treasury Secretary, Scott Bessent, pitching the idea to a friendly TV outlet:

“You’re going to see substantial announcements over the next couple of days in terms of things we don’t grow here in the United States. Coffee being one of them, bananas, other fruits. Things like that. So that will bring the prices down very quickly.”

The actual list covers 238 tariff lines, including coffee and bananas, and adds beef, Chinese water chestnuts, cassava, taro root, cocoa beans, mangoes, and so on. What does this actually mean? The 238 lines together totaled $51.6 billion worth of imports in 2024. Tariff collection on these products, comparing January to July in 2024 to the same period this year, has jumped from $240 million to $1.72 billion. Bessent’s coffee and bananas illustrate how it works:

Bananas: The Congressionally authorized “MFN” tariff on bananas is zero, except for a 1.4% rate on dried bananas and chips. From January to July last year, CBP collected $0.24 million in tariffs on bananas. The $81 million through July this year — up 33,650% — mainly comes from new 10% tariffs on Guatemalan bananas, and 15% tariffs on bananas from Ecuador and Costa Rica. They brought $64 million, and 10% tariffs on Honduran, Colombian, and Peruvian varieties added $15 million more. As a legal/policy note, the Trump administration’s application of tariffs to these bunches overwrites the actual U.S. tariff system and breaches U.S. WTO commitments, and badly violates the U.S. FTAs with Central America, Colombia, and Peru.

Coffee: Coffee’s Congressionally authorized “MFN” tariff is zero, again with the small exception of a 1.5 cent/kilo tariff on “coffee substitutes containing coffee.” CBP’s coffee take is up $1.3 million in 2024 to $359 million in 2025, for a “28,170%” increase. As with bananas, the increase has hit Latin growers hardest. An initial 10% tariff on Brazilian coffee rose to 50% in July, out of pique over the prosecution of ex-president Yair Bolsonaro, and has brought $69 million. The 10% tariffs on Colombian and Guatemalan coffees brought $53 million and $36 million, respectively. The 20% tariff on Vietnamese coffee brought $13 million, the 10% on Ethiopian yirgacheffe $11 million, and the 19% on Indonesian Sumatra and kopi luwak $7 million.

The rise in banana and coffee tariffs is statistically striking — you don’t often get a chance to talk about 33,500% increases — and beef likewise. But the combined $1.7 billion is only a couple of pennies on the dollar, 2%, when placed against the $79 billion in overall cost increases the Trump administration’s tariff decrees entail. The biggest new costs so far are on industrial consumers — factories buying metal and parts, farmers buying fertilizer, construction sites, utilities, etc. — but the tariff increases in retail and household goods are striking too. Here’s a representative list, with some of Friday’s new exclusions in italics:

Jan. – July 2024 Jan. – July 2025
Total tariff collection  $43 billion  $122 billion
… on cars    $1,968 million   $12,974 million
… on shoes     $1,871 million     $3,227 million
… on toys and dolls                      $0        $888 million
… on sports equipment       $243 million        $694 million
… on beef       $135 million        $627 million
… on TV sets       $134 million        $500 million
… on coffee        $1.3 million        $359 million
… on makeup          $85 million        $301 million
… on vacuum cleaners         $90 million        $180 million
… on OTC medicines                       $0        $144 million
… on tampons         $14 million          $85 million
… on bananas      $0.24 million          $81 million
… on cocoa butter                       $0          $67 million
… on olive oil            $8 million          $66 million
… on wigs & hair extensions         $10 million          $66 million
… on personal computer keyboards                       $0          $48 million
… on bandaids & other bandages                       $0          $45 million
… on musical instruments          $19 million          $38 million
… on ginger, turmeric, & spices            $4 million          $17 million

In sum: The retreat on coffee, beef, and bananas, like Emperor Napoleon’s initial dispatch of a few wounded soldiers home, is in principle quite a large concession: the administration has abandoned its claims earlier this year that tariffs don’t raise prices, and that foreigners pay them anyway. In practice, though, it’s a cosmetic gesture rather than a solution. Mr. Trump’s tariff increase on tampons is about as big as the one on bananas, but (at least for now) the tampon tax is staying in place. The tariff hike on toys is twice as big as that of the banana and coffee tariffs put together, and that on shoes tariff increase alone offsets the entire 238-product exclusion list. And since tariffs got much higher in August and we don’t yet have post-July revenue figures, the actual totals now will be much higher.

In the Emperor’s case, the cosmetic gesture was a mistake. The invasion had failed, and the longer he waited to liquidate it, the worse things got. In the end, only 10,000 of his men made it home. There’s maybe a lesson there.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

  • Defend the Constitution and oppose rule by decree;
  • Connect tariff policy to growth, work, prices and family budgets, and living standards;
  • Stand by America’s neighbors and allies;
  • Offer a positive alternative.

Napoleon retreats from Moscow.

Bessent on coffee and bananas.

PPI background:

PPI Trade Fact from August 21, 2024: Tariffs raise consumer prices. That’s what they’re supposed to do. It usually works. No surprises. Trust Alice, not the Queen.

Laura Duffy’s October 2024 “It’s Not 1789 Anymore: Why Trump’s Backward Tariff Agenda Would Hurt Americans,” explains why tariffs are a poor form of taxation: they can’t raise enough revenue, are opaque and regressive, causing downstream harms.

Tariff decrees:

The actual, Congressionally authorized, Harmonized Tariff Schedule of the United States.

The April 2 “international emergency” trade balance decree.

… the July 31 revision with current country-by-country rates.

… and last Friday’s November 14 re-revision excluding tropical agriculture, metal ores, etc.

The March 26 “national security” decree on cars and parts.

Tariff data:

USITC’s Dataweb has tariff revenue, import values, and more by product and country. Updated only through July 2025.

CBP breaks out FY 2025 tariff collection by decree, but not product and only a few countries; data through September.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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Kahlenberg for The Free Press: Democrats Have a Patriotism Problem. Here’s How to Fix It.

Posted on by Max Sherrill

Thursday marks the 100th anniversary of Robert F. Kennedy’s birth. Bobby Kennedy is mostly remembered today as a liberal icon, a tribune of the poor, and a critic of the Vietnam War, which he surely was. But it’s crucial, on this anniversary, to recall that he embodied a special brand of liberal patriotism that is at odds with so much of what the progressive left represents today.

It’s especially important for Democrats to reflect on Kennedy’s unapologetic patriotism as they celebrate their big victories in the November 4 elections. The returns revealed a persistent class gap in voting patterns, which will matter a great deal more in the 2028 presidential election, when noncollege-educated voters are likely to play a much bigger role than they did in the recent odd-year elections.

Keep reading in The Free Press.

Ainsley in the IPS Journal: ‘The working class hasn’t gone anywhere — it’s just transformed’

Posted on by Alex Terr

When Labour won in July 2024, there was a fair amount of goodwill toward the new government. However, there was also scepticism about what the government could deliver. People were worried about the state the Conservatives had left the country in. There were also questions about what Labour really meant by ‘change’, its campaign slogan.

After a fairly sure-footed start, especially on foreign policy, the government made several missteps that cost it dearly. The most significant was the decision to cut the winter fuel allowance, not just for wealthier pensioners, which would have been justifiable, but for middle-income pensioners as well. Labour did this to reassure the markets ahead of its first major budget, to show it could be trusted with public finances. But the move unsettled people and raised doubts about what Labour actually stood for.

At the same time, Labour kept blaming the Conservatives without giving a clear destination of what they were going to do. Confidence fell among businesses and voters alike. When the budget eventually came, it included a substantial increase to employers’ National Insurance contributions. Businesses felt this cut against everything Labour had promised about growth and wealth creation.

Since then, we’ve seen a disappointing economic performance. On top of that, you had the ‘freebies’ scandal: It’s quite normal for MPs to be given tickets to events or dinners or things like that, but they’re required to declare it. When this all came out, the public was quite taken aback. Labour failed to get a grip on that quickly. In opposition, they had successfully repositioned the party as fighting for ordinary working people. In government, their decisions and handling of these issues made it feel like they’d lost sight of that.

Read more in the LPS Journal.